Recording of transactions for purchase of Goods in the Books of Account with Journal Entry.

Purchase of Goods are made repeatedly in manufacturing and trading business units. One must have to know about the procedure for recording the transactions for purchase of Goods.

Let's know about the commonly used Accounting Records with Journal Entry and Ledger Posting including other Record Books.

One must have to keep in mind that when goods are purchased,Purchases A/c always shows debit effect.

This post shares knowledge on :

Journal Entry for Cash purchase of Goods and Credit Purchase of Goods.
Posting of Cash Ledger and Purchases Ledger from the Journal Entry.
Posting of Sundry Creditors Ledger and Purchases Ledger from the Journal Entry.
Recording of Purchase Register etc.

When Goods are purchased on immediate Cash Payment i.e Cash Purchase of Goods.

Debit Account - Purchase Account

Credit Account - Cash Account.

Journal Entry :

Ledger Posting :

In Cash Ledger/Cash Book.

In Purchases Ledger.

Recording in Purchase Register.

Example :

In the books of M/s.Kohinoor Vegetables,Cuttack,Odisha, Goods purchased from M/s.Green Foods,Koraput,Odisha for ₹45,000/- as per Cash Memo No. 501 dt.10/05/2021.

Journal Entry :

Ledger Posting :

In Cash Ledger/Cash Book

Purchase of Goods on Cash - Posting in Cash Ledger.

In Purchases Ledger.

Recording in Purchase Register.

Cash purchase of Goods - Entry in Purchase Register.

When Goods are purchased on immediate Payment through Bank Account i.e Cash Purchase of Goods(payment through Bank Account).

Debit Account - Purchase Account

Credit Account - Bank Account.

Journal Entry :

Ledger Posting :

In Bank Account/Bank Ledger.

Cash purchase of Goods(payment through Bank Account) - Posting In Bank Ledger.

In Purchases Account/Purchases Ledger.

Cash purchase of Goods(payment through Bank Account) - Posting In Purchases Ledger.

Recording in Purchase Register.

Example :

In the books of M/s.Kohinoor Vegetables,Cuttack,Odisha, Goods purchased from M/s.Green Foods,Koraput,Odisha for ₹95,600/- as per Cash Memo No. 504 dt.11/05/2021. Payment made through State Bank of India Current A/c No-24005000311.

Journal Entry :

Ledger Posting :

In SBI CA No.24005000311 Ledger.

Purchase of Goods on Cash(paid through Bank) - Posting in Bank Ledger.

In Purchases Ledger.

Recording in Purchase Register.

When Goods are purchased on Credit i.e Credit Purchase of Goods.

Debit Ledger - Purchases Account.
Credit Ledger - Sundry Creditor/Supplier/Party Account.

Journal Entry :

Ledger Posting :

In Purchases Account.

Purchase of Goods on Credit - Posting in Purchases Ledger

In Sundry Creditors Ledger/Suppliers Ledger.

Purchase of Goods on Credit - Posting in Suppliers/Creditors Ledger.

Recording in Purchase Register.

Example :

In the books of M/s.Kohinoor Vegetables,Cuttack,Odisha, Goods purchased from M/s.Green Foods,Koraput,Odisha for ₹70,400/- as per Invoice No. 516 dt.16/05/2021.

Debit Account - Purchases Account

Credit Account - M/s. Green Foods Account(Supplier)

Journal Entry :